Thursday, July 14, 2011

Al Capone Gives a Small Businessman Advice

Can you picture Al Capone telling a small businessman that Al and his friends are "concerned" about the business risks that the company is running and want to help but don't understand why the businessman doesn't want to take out "insurance" with Al Capone's mob.

That is the picture that runs through my head as I watch this idiotic video of Ron Paul supposedly "asking a question" of the Federal Reserve's Ben Bernanke. The undertone of everything Ron Paul says is that "he has a deal that Bernanke shouldn't refuse", wink, wink, nudge, nudge...

I get a chuckle out of Ron Paul's "money out of thin air" comment. Gosh, when I show up at work and get paid at the end of the week, I get "money out of thin air". Money is a medium of exchange. The Federal Reserve lent money and made $125 billion on its loans, but for Ron Paul that is somehow unreal and must "thin air". But thin air is very very real, just like my weekly salary.

Ron Paul shows his ignorance in thinking that gold is "money". If I had a pound of goal I couldn't use it to buy groceries or gas. I would have to find a gold exchange to transfer the gold into money (for a fee!) and then use the money to buy goods. Gold isn't money. It is a fetish. It makes nice jewelry. It can be used by big institutions and really rich people as a "store of value" but for little people, gold is just a shiny metal, nothing else.

What this clip demonstrates is that Ron Paul is less interested in asking questions and learning something than grandstanding and lecturing. He isn't interested in answers. He wants to "tell" Ben Bernanke what he should be doing. But Ron Paul is an idiot and doesn't have much of a clue how to run the Federal Reserve. In Ron Paul's mind, he sees himself as a smart dude, but he demonstrates he is a badly-informed, half-assed "know-it-all".

Ron Paul is one of the leading ideological nuts in the Republican party. He is emblematic of the crazy devolution of "politics" in the US from concern about government to a circus in which clowns like Ron Paul rant and pose. This is the equivalent of Bomber Joe McCarthy of the 1950s.

Update: Ron Paul shows his ignorance of the Federal Reserve. But here's a video to help you get an understanding of "Federal Reserve operations" that expand the money supply in a panic like 2008 and how that "just a pile of printed money" will be dried up safely without causing inflation over the next 3-5 years:

Ron Paul can't be bothered to actually understand the above. Instead, he is happy being "critic" and pretending that Ben Bernanke is an idiot who isn't as smart about economics as Ron Paul whose degree is in medicine, not finance or economics. It takes a really big ego and a great deal of stupidity to be a Ron Paul and publicly show your ignorance like he does in the above video where he "questions" Ben Bernanke.

Ron Paul has only the faintest glimmer of an idea about what the Federal Reserve does. What Ron Paul thinks he understands is that gold is "hard money" and the US needs "hard money" and that the value of the US dollar should be pushed higher and higher. What Ron Paul doesn't understand is that gold isn't a currency and there is a really, really good reason why you want your currency to fall when your economy is in recession: you want to sell goods to put your people to work, but the rest of the world will only buy if it sees a "bargain". That requires a lower dollar. Ron Paul wants to push the dollar up and drive the US from a Little Depression into a Great Depression. But he is too stupid to know that is what his "policies" imply. Sadly Ron Paul sits on the Senate committee overseeing the banking system. When you have idiots like that in charge you are asking for your economy to crash and burn. Tragic.